Rising gas prices, fueled by the Iran conflict, are offsetting larger 2026 tax refunds, straining households.

Rising gas prices, driven by the Iran conflict, are eroding the impact of larger tax refunds in 2026, with the national average reaching $3.94 per gallon—up nearly a dollar in a month. Economists project gas costs could peak at $4.36 in May, with households facing a $740 annual increase, nearly matching the $748 average refund boost. Despite higher refunds averaging $3,676, lower- and middle-income families are especially strained, as rising fuel costs reduce disposable income. A partial government shutdown has worsened airport delays due to unpaid TSA officers, while financial markets declined amid inflation fears and a cautious Federal Reserve outlook.